US Trade Deficit Hits New High Amid Pre-Tariff Import Surge

The United States trade deficit widened significantly in March, reaching a record $140.5 billion, as businesses ramped up imports ahead of anticipated tariffs from the Trump administration.

The increase marks a 14% rise from February’s revised deficit of $123.2 billion, according to data released by the US Census Bureau and the Bureau of Economic Analysis.

Imports climbed 4.4% to a record $419 billion, driven by a historic rise in consumer goods, including pharmaceuticals, motor vehicles, and capital equipment. Exports, by contrast, saw only a modest increase of 0.2%, totaling $278.5 billion. The goods deficit alone grew by $16.5 billion, while the services surplus narrowed slightly by $0.8 billion to $23 billion.

The surge in imports was widely interpreted as a preemptive move by companies seeking to build inventories before tariffs took effect. President Donald Trump’s reciprocal tariff strategy, announced in early April, introduced duties on multiple trade partners with the goal of promoting fairer trade terms, encouraging domestic manufacturing, and bolstering national industrial security.

The economic impact of the import surge was notable. In the first quarter of 2025, the US economy contracted by an annualized 0.3%, with net exports subtracting nearly five percentage points from GDP—the steepest drag on record. Bloomberg Economics anticipates the trade deficit may begin to narrow in the near term, citing a decline in US-bound container shipments from China since mid-April and reduced import demand reflected in purchasing managers’ survey data.

Geographically, the trade gap with Ireland increased sharply to $29.3 billion, driven by a substantial rise in pharmaceutical imports. Meanwhile, the deficit with Mexico held near record levels, while the shortfall with China declined. The services sector continued to show a surplus, though slightly reduced from the previous month, with declines in travel-related exports and imports.

Year-to-date figures underline the broader trend: the cumulative goods and services deficit rose by nearly 93% compared to the same period in 2024. Imports have grown by 23.3% year-over-year, while exports rose by 5.2%.

With input from Bloomberg, Newsweek, and US Bureau of Economic Analysis.